Scottish councils got extra £300m by mistake

Holyrood pools business rates from councils and redistributes them based on predicted revenueJANE BARLOW/PA

The Scottish government has overpaid councils by almost £300 million because it inaccurately predicted the revenue from business rates.

Councils collect the rates, which are pooled by Holyrood and redistributed in its annual budget. The figure paid out, which makes up almost a third of funding for councils provided by the government, is based on forecasts. This year was the fourth in a row that the income was overestimated and at the end of the year to April there was a cumulative deficit of £297 million.

A report by Audit Scotland noted that the government had said that it intended to balance the account but had no formal plan in place.